The Saginaw home that hit the housing market at a cut-rate price sold for less than the price of a McDonald’s value meal. The abandoned home on 1606 Perkins received eight bids on eBay.com and sold for $1.75 Wednesday evening. Posted to the door is a notice of show cause hearing and judicial foreclosure hearing set for January 28, 2009. The notice also states there are back taxes owed on the property. The high bidder was 30-year-old Joanne Smith, of Chicago, Ill. “I am going to try and sell it,” she said of the home. “I don’t have any plans to move to Saginaw. I don’t have any plans of moving from (Chicago).” Smith moved to the Windy City five years ago from Miami, Fla. She has not seen the property and has not visited Saginaw. She will pay additional charges, aside from the dollar and change it cost her to win the auction. Back taxes and a trash/weed clean-up will set the final price tag around $850. The fee is due by Tuesday, March 31, or the city will foreclose on the property. “The people who I bought the house from, they are not giving me any information about it,” Smith said. “I know that the property is abandoned and that there are taxes owed on the house, but all I have is their e-mail.” The Saginaw News could not reach the seller, Southern Investments LLC, for comment. “I was trying to go see it, but I am not gonna make a 300-mile trip if I can’t go in the house and see inside,” Smith said. “It could be haunted or something.”

The real estate market is so awful that buyers are now scooping up homes for as little as $1,000. There are 18 listings in Flint, Mich., for under $3,000, according to Realtor.com. There are 22 in Indianapolis, 46 in Cleveland and a whopping 709 in Detroit. All of these communities have been hit hard by foreclosures, and most of these homes are being sold by the lenders that repossessed them. “Foreclosures have turned banks into property management companies,” said Heather Fernandez, a spokeswoman for Trulia.com, the real estate Web site. “And it’s often cheaper for them to give these homes away rather than try to get market value for them.”

In Detroit for instance, Century 21 Villa owner Randy Eissa has a three-bedroom, one-bath bungalow of about 1,000 square feet listed at just $500. It’s a nice place with lots of light, but it needs a total rehabilitation inside, which Eissa estimates will cost between $15,000 and $20,000. But that’s not bad, considering that the home last sold for $72,000 in late 2007, according to Zillow.com. With prices this low, lenders aren’t looking to make any money on these deals. They
just want to get these houses off their books, so they don’t have to bear the cost of maintaining them and paying property taxes. In fact, the $500, $1,000 or $3,000 that a buyer forks over often goes straight to the real estate brokers as a commission. And often the lenders have to kick in extra cash to make it worthwhile for a realtor even take the listings, according to Eissa. “Usually these homes are bank repossessions that the lenders have already tried to sell on the
market, perhaps then put up for auction without success and then re-listed,” he said.

Fixer uppers
These houses are almost always small fixer-uppers. Wiring, plumbing and heating systems have to be replaced, walls and ceilings sheet-rocked, plumbing and light fixtures installed and new kitchen cabinets and counters put in. Few come with working appliances. Often buyers are legally required to rehab these homes to bring them up to code. In Detroit, buyers are required to sign Affidavits of Compliance Responsibility, which obligates them to make repairs outlined in an inspection report. Only after that can a certificate of occupancy will be issued, which makes the house legal to live in.

But even factoring in these costs, they’re still bargains. And as the housing crisis drags on, there are more and more four-figure listings popping up, as lenders try to unload their repossessed properties. Cleveland is another city with many incredibly inexpensive homes. On Ardenall Avenue, in East Cleveland, McMullen Realty has a listing for a four-bedroom, one-and-a-half bath house for $1,900. It’s been vandalized inside, but the outside is in good shape.

It features a deep front porch with Doric columns, double dormer windows and a separate garage. It’s an excellent opportunity, according to agent Tonya Stoudamire. The last time it sold was in March of 2008 when it went for $16,677, according to Zillow. “East Cleveland has a beautiful housing stock,” she said. “These houses just need someone to come in and love them a little.”

Another property for sale in Birmingham Ala. is priced at $1,900. The one-bedroom, one bathroom home was built in 1923 and has major fire damage, according to its listing broker, Tom Murphy Realty. The listing states that “Rooms are hard to distinguish.” But it’s on a nice-sized lot, about 0.38 acre, close to downtown and transportation and has all utilities. Nearby, comparable homes in good condition sell for about $100,000, according to Zillow.

Rehab money
Most of these $1,000 homes can be renovated relatively inexpensively, and buyers can actually get government help to finance these repairs. The U.S. Department of Housing and Urban Development (HUD) has a special loan program for just such purchases. Its rehabilitation mortgage insurance, available through FHA-approved lenders, was designed to encourage banks to issue a single, long-term loan to buyers that covers both the acquisition and rehabilitation of
a property, according to HUD spokesman Brian Sullivan. He adds that there may also be grant money available from the $4 billion Neighborhood Stabilization Program, which was a part of the massive housing rescue bill passed by Congress in July, to assist buyers with grants for down payments. Buying homes like these is certainly a leap of faith; they’re generally not in the best of neighborhoods and they’re often surrounded by many other vacant and deteriorating homes. Still, some of these neighborhoods may turn around and provide residents with good, dirt-cheap housing. “It’s a sad time,” said Stoudamire. “But it’s also a time of opportunity, especially for low and moderate income people.”

If there’s a house on the market with dead grass, no one will buy it. So to bring in the green, you simply need to add some green – to the lawn. Instantly it will have a better chance of selling. “I would say, ‘I paint grass.’ The response was, ‘You do what?’ And I say, ‘Yeah, I paint grass,'” says Nick Terlouw. Terlouw, who runs Greener Grass Company, has found a creative way to help sell homes in the housing crisis. The entrepreneur from northern California is painting brown lawns green. He says business is booming. The lawn painter is contracted by city officials and realtors to make properties more
appealing to prospective buyers. Most of his calls come from Stockton, California, the foreclosure capital of the nation, where 1 in 25 houses face foreclosure. “It’s good for the realtor because it gives curb appeal to the house and it keeps the looters and vandals away because it looks lived in,” explains Terlouw. Using a 50-gallon motorized insecticide sprayer, Nick says he sprays a water-based non-toxic dye across the lawn. It only takes minutes to transform a brown lawn into one that looks lush and alive. Nick earns up to $300 per lawn. It appears there’s plenty of gold to be found in green. The
paint lasts for about four months. Nick says he wants to expand his business to places like Arizona and Nevada, where the hot summers are especially tough on grass.

A Stockton man sees the growing number of dead brown lawns of foreclosed homes in the area and sees nothing but green. Nick Terlouw has launched the Greener Grass Co., which amounts to a service in which he sprays dead lawns with a deep green, water-based dye that makes the turf look good enough for a golf course or a professional football stadium. For between $175 and $225 per yard, Terlouw uses a motor-powered 50-gallon insecticide sprayer designed for treating
orchard trees. He waves his magic wand and in broad sweeps, a la painting a house, makes tired, if not expired, turf sit up and sparkle like Shirley Temple. “Looking good from over here,” hollered Chad Lam, a homeowner watching Terlouw spruce up a brown lawn across the street. “I’m glad to see that happen. It gives us all a lift around here.” Terlouw, who formerly had a window-cleaning business, said he got the idea for the new business from football games. “They paint logos on football fields,” he said. “Why can’t we do the same for homes?”

He’s had about 10 jobs since he started the business six months ago, but he expects to do better this year, with home foreclosures continuing through this year. The wet season literally puts a damper on business because he can spray only when the turf is thoroughly dry. The commercially available lawn dye needs to dry two hours, but then will last for three to four months, he said. Terlouw is trying to market his service to real estate agents and property managers. One
home-owners association has hired him to spray a couple of dead lawns, he said. “Honestly, I see a gold mine here.” One of his customers is Dave Harmon, a real-estate agent with Coldwell Banker Grupe, Stockton. He paid Terlouw $200 to spray the front lawn before a weekend open house on a foreclosure house in a relatively upscale development northeast of March and West lanes. Most asset managers of foreclosure properties wouldn’t be interested in covering such a cosmetic improvement to the lawn, Harmon said, so it’s coming out of his pocket. He’s hoping it will pay off with a sale. He said he might use the service again and suspects that other agents could be interested as well to help spruce up the curb appeal of some foreclosure properties. “I would only do it on homes in nice locations where I could attract some attention at an open house,” he said. “Homes in a mediocre neighborhood probably won’t get much play so far as decorating lawns.”

So would this be a matter of disclosure by the seller to any prospective buyer, to wit: the grass that looks great may be, or is, dead? Harmon said it hadn’t crossed his mind that he would need to. Actually, at the house where Terlouw was spraying Friday, the grass looked exceedingly anemic – perhaps mostly from winter dormancy – but the turf clearly wasn’t dead. After the spraying, the grass had a sparkling appearance and looked not only alive but also lush and thriving. This was so pronounced that the lawn jumped out on the street as too green compared with any other lawns, even the best kept ones, in the neighborhood. In other words, the grass looked so good as to be suspect. Paul Tamayo was visiting his daughter down the street from Terlouw’s spray job and couldn’t help but come over and ask about the service. “I’m going to talk to my daughter to see if she wants it done,” he said. “I mean, that’s beautiful.”

On a recent morning, a 27-year-old skateboarder who goes by the name Josh Peacock peered into a swimming pool in Fresno, Calif., emptied by his own hands — and the foreclosure crisis — and flashed a smile as wide as a half-pipe. “We have more pools than we know what to do with,” said Mr. Peacock, who lives in Fresno, the Central Valley city where thousands of homes, many with pools behind them, are in foreclosure. “I can’t even keep track of them all anymore.”

Across the nation, the ultimate symbol of suburban success has become one more reminder of the economic meltdown, with builders going under, pools going to seed and skaters finding a surplus of deserted pools in which to perfect their acrobatic aerials. In these boom times for skaters, Mr. Peacock travels with a gas-powered pump, five-gallon buckets, shovels and a push broom, risking trespassing charges in the pursuit of emptying forlorn pools and turning them into de facto skate parks. “We can just hit them back to back,” said Mr. Peacock, who preferred to give his skateboarding name because of the illegality of his activities.

Skaters are coming to places like Fresno from as far as Germany and Australia. Mr. Peacock said his floor and couch were covered by sleeping bags of visiting skateboarders each weekend. Some skateboarders use realty tracking sites like realquest.com and realtor.com to find foreclosed houses with pools, while others trawl through satellite images from Google Earth. On the Web site skateandannoy.com, where skaters trade tips about how to find and drain abandoned pools, one poster wrote about the current economic malaise. “God bless Greenspan,” the post read, “patron saint of pool
skatin’.”

Pool builders feel differently, of course. In Phoenix, for example, where scorching summers can make pools seem like a survival tool, the city has issued fewer than half the number of residential pool permits this year as in 2007, as builders are being pummeled by declining home construction and evaporating credit for potential buyers. Several large companies have gone bust this year, including Riviera Pools, which once sponsored the swimming pool at Chase Field, where the
Arizona Diamondbacks play baseball. Smaller contractors, retailers and pool cleaning companies have also failed, leaving unpaid bills and unfinished projects. “You’ve got people that still want to build pools, but now you’re getting maybe 20 percent or 10 percent that can actually qualify now,” said Dave Brandenburg, a pool builder in north Phoenix who estimated business was off 40 percent to 70 percent. “Before it was, ‘Sure, no problem.’ Now it’s like, ‘Sorry.’ ”

Business is just as bad in Florida, where builders like Ben Evans, the chief executive at American Pools and Spas in Orlando, said he had let much of his staff go as orders for pools dropped to 150 this year, from about 1,000 in 2007. “I’m just looking for my bailout money,” Mr. Evans said, ruefully. “Do you know where that is?” In many warmer states, the authorities are trying literally to bail out pools, using pumps, dredges and strong stomachs to attack a surge in abandoned ones that have attracted all manner of nastiness — rats or belligerent raccoons, or algae, dead leaves and worse. These so-called green pools can become a breeding ground for mosquitoes carrying West Nile virus. California officials estimate that there are tens of thousands of abandoned pools in the state, with as many as 5,000 in places like Sacramento County, where a building boom in the capital’s suburbs has gone bust. California law calls for fines of up to $1,000 per day for egregious cases of pools left with standing water, but officials say the sheer numbers of cases are daunting.

John Rusmisel, the district manager for Alameda County’s mosquito abatement district, said he used a promotional company that flies banners over football games and other events to help find the fetid swimming pools. “They were up there seeing all these funky pools,” said Mr. Rusmisel, who added that his workload had doubled in the last year. “So they just started to take pictures.” Once he finds a problem pool, his workers treat it with a combination of insecticide and mosquitofish, pinky-size carp that find mosquito larvae delectable. But they do not empty any pools, he said, because in a good rain, an empty pool can be partially lifted out of the hole by groundwater, he said. “I’ve seen them float up a foot or two,” Mr. Rusmisel said.

Dirk Voss, a code enforcement agent in Oxnard, Calif., northwest of Los Angeles, said even those residents who manage to stay in their homes often could not maintain the pool. “They don’t want to pay for the power to run the motor or pay for the chemicals to treat them,” Mr. Voss said. But skaters do not mind doing the work, whether it is that of scouting
for pools or scouring them. Adam Morgan, 28, a skater from Los Angeles, said it used to take months to find a good skating pool. Now the task is a breeze. “There are more pools right now than I could possibly skate,” Mr. Morgan said. “It’s pretty exciting.” Mr. Peacock travels around town in his pickup searching for the addresses of homes he has learned have been foreclosed on, either via the Internet or from a friend who works in real estate. He has also learned to spot a foreclosed house, he said, by looking for “dead grass on the lawn and lockboxes on the front door.”

Once he has found a pool he likes — he prefers older, kidney-shaped ones — he drains the water into the gutter with his pool pump, sometimes setting up orange cones on the sidewalk to appear more official. Later, he returns to shovel out the muck, and then lets the pool dry. In order to maintain a sense of public service, the skateboarders adhere to basic rules: no graffiti, pack out trash and never mess with or enter the houses. A day or two later, the skating begins, often in short bursts during the workday to avoid disturbing neighbors or attracting police attention. Twice in recent weeks, Mr. Peacock said, the police caught the skateboarders in an empty pool and demanded they leave but did not issue citations. Mr. Peacock said he was helping the environment. “I’m doing the city a favor,” he said, by emptying fetid pools. “They’re always talking about West Nile on the news. Those little fish can only eat so much.”

Last week San Diego experienced an unprecedented three major take-over style bank robberies in one day. In the past two weeks there have been an astounding number of kidnapping bank employees and their families for vault ransom, the type of bank robbery we were victims of, and today bank robberies in New York came in a wave of five in a short period of time and relatively short distance. These are all signs of economical times that bring desperation to a very high and
unmanageable level. Reports show that the FBI was gearing up for an increase in bank robberies during the holidays. This is typically the time of year we see high numbers of robberies due to the pressures of the holiday season spending and gift giving. With the recession in the mix and knowing from past recessions such as in 2001 where record numbers of robberies were reported, it is no surprise that everyone is on edge. But what is being done to better protect and train front line staff and those handling America’s cash and what is being said about the reality of Post Traumatic Stress Disorder (PTSD)? Not much. The training is the same and there is little to no mention about the reality of the aftermath of such a violent incident. The policies and procedures are the same as over a decade ago and the FDIC is definitely not holding banks to the standards of “deterring” robbers and training staff according to current robbery trends as mandated in the Bank Security Act of 1968.

Recent stats:
The Los Angeles metro area has had nearly 200 bank robberies this year, compared with 156 at the same time last year, according to FBI. Elsewhere:
– In San Francisco, bank robberies jumped from 20 in the first five months of 2007 to 32 for the same period in 2008.
– Bank robberies in the Houston metro have more than doubled since 2007.
– Jackson, Miss., reported more bank robberies in the first quarter of 2008 than in all of 2007.
– Milwaukee is reporting double the number of robberies and Atlanta is now considered the bank robbery capitol of the US.

The numbers are similar across the country. The only way to do more to protect the staff, customers and family members and finally get them to talk about PTSD is for banks to pull their heads out of the sand of insurance that protects only them and understand that this is a violent victimization and trauma to the individuals working to help their bottom line. Can someone please tell the big wigs at the top of the FDIC and banking industry ladder that the bank itself is not the only victim?

Remember Thomas Friedman’s McDonald’s theory of international relations? The thinking was that if two countries had evolved into prosperous, mass-consumer societies, with middle classes able to afford Big Macs, they would generally find peaceful means of adjudicating disputes. They’d sit down over a Happy Meal to resolve issues rather than use mortars. The recent unpleasantries between Israel and Lebanon, which both have McDonald’s operations (here and here, respectively) put an end to that reasoning. But the Golden Arches theory of realpolitick was good while it lasted. In the same spirit, I propose the Starbucks Theory of International Economics. The higher the concentration of expensive, nautical-themed faux-Italian branded frappuccino joints in a country’s financial
capital, the more likely the country is to have suffered catastrophic financial losses.

It may sound doppio, but work with me. This recent crisis has its roots in the unhappy coupling of a frenzied nationwide real-estate market, centered in California, Las Vegas and Florida, and a nationwide credit mania, centered in New York. If you could pick one brand name that personified these twin bubbles, it was Starbucks. The Seattle-based coffee chain followed new housing developments into the suburbs and exurbs, where its outlets became pitstops for real-estate brokers and their clients. It also carpet-bombed the business districts of large cities, especially the financial centers, with nearly 200 in Manhattan alone. Starbucks’s frothy treats provided the fuel for the boom, the caffeine that enabled deal jockeys to stay up all hours putting together offering papers for CDOs, and helped mortgage brokers work overtime processing dubious loan documents. Starbucks strategically located many of its outlets on the ground floors of big investment banks. (The one around the corner from the former Bear Stearns headquarters has already closed).

Like American financial capitalism, Starbucks, fueled by the capital markets, took a great idea too far (quality coffee for Starbucks, securitization for Wall Street) and diluted the experience unnecessarily (subprime food such as egg-and-sausage sandwiches for Starbucks, subprime loans for Wall Street). Like so many sadder-but-wiser Miami condo developers, Starbucks operated on a “build it and they will come” philosophy. Like many of the humiliated Wall Street firms, the coffee company let algorithms and number-crunching get the better of sound judgment: if the waiting time at one Starbucks was over a certain number of minutes, Starbucks reasoned that an opposite corner could sustain a new outlet. Like the housing market, Starbucks peaked in the spring of 2006 and has since fallen precipitously.

America’s financial crisis has gone global in the past month. European and Asian governments, which until recently were rejoicing over America’s financial downfall, have had to nationalize banks and expand depositors’ insurance. Why? Many of their banks feasted on American subprime debt and took shoddy risk-management cues from their American cousins. Indeed, the countries whose financial sectors were most connected to the U.S.-dominated global financial system, the ones whose financial institutions plunged into CDOs, credit default swaps, and the whole catalog of horribles, have suffered the most. What does this have to do with the price of coffee? Well, when you start poking around Starbucks’s international store locator, some interesting patterns emerge. At first blush, there’s a pretty close correlation between a country having a significant Starbucks presence especially in its financial capital, and major financial cock-ups, from Australia (big blow ups in finance, hedge funds and asset-management companies; 23 stores) to the United Kingdom (nationalization of the nation’s largest banks). In many ways, London in recent years has been a more concentrated version of New York—the wellspring of many toxic innovations, a hedge-fund haven. It sports
256 Starbucks. In Spain, which is now grappling with the bursting of a speculative coastal real-estate bubble (sound familiar?), the financial capital, Madrid, has 48 outlets. In crazy Dubai, 48 Starbucks outlets serve a population of 1.4 million. And so on: South Korea, which is bailing outs its banks big time, has 253; Paris, the locus of several embarrassing debacles, has 35.

But there are many spots on the globe where it’s tough to find a Starbucks. And these are precisely the places where banks are surviving, in large part because they have not financially integrated with banks in the Starbucks economies. In the entire continent of Africa, whose banks don’t stray too far, I count just three (in
Egypt). We haven’t heard much about bailouts in Central America, where Starbucks has no presence. South America’s banks may be buckling, but they haven’t broken. Argentina, formerly a financial basketcase, and now a pocket of relative strength, has just one store. Brazil, with a population of nearly 200 million, has a mere 14. Italy hasn’t suffered any major bank failures, in part because its banking sector isn’t very active on the international scene. The number of Starbucks there? Zero. And the small countries of Northern Europe, whose banking systems have been largely spared, are largely Starbucks free (there are two in Denmark, three in the Netherlands, and none in the Scandinavian trio of Sweden, Finland, and Norway).

My tentative theory: having a significant Starbucks’ presence is a pretty significant indicator of the degree of connectedness to the form of highly caffeinated, free-spending capitalism that got us into this mess. It’s also a sign of a culture’s willingness to abandon traditional norms and ways of doing business (virtually all the
countries in which Starbucks has established beachheads have their own venerable coffeehouse traditions) in favor of fast-moving American ones. The fact that the company or its local licensee felt there was room for dozens of outlets where consumers would pony up lots of euros, liras and rials for expensive drinks, is also a pretty good indicator that excessive financial optimism had entered the bloodstream. This theory isn’t foolproof. Some places that have relatively high
concentrations of Starbucks, such as Santiago, Chile (27) have been safe havens. Russia, which has just six, has blown up. But it’s close enough. And so if you’re looking for potential trouble spots, forget about the Financial Times or the Bloomberg terminal. Just look at the user-friendly Starbucks store locator. The next potential trouble spot? I just returned from a week in Istanbul, a booming financial capital increasingly tied to the fortunes of Western Europe. It has a storied coffee culture, yet I gave up counting the number of Starbucks stores occupying prime real estate. It turns out there are 67 of them. Watch out, Turkey.

Reno, Nevada (AP) – A few tents cropped up hard by the railroad tracks, pitched by men left with nowhere to go once the emergency winter shelter closed for the summer. Then others appeared — people who had lost their jobs to the ailing economy, or newcomers who had moved to Reno for work and discovered no one was hiring. Within weeks, more than 150 people were living in tents big and small, barely a foot apart in a patch of dirt slated to be a parking lot for a campus of
shelters Reno is building for its homeless population. Like many other cities, Reno has found itself with a “tent city” — an encampment of people who had nowhere else to go.

From Seattle to Athens, Georgia, homeless advocacy groups and city agencies are reporting the most visible rise in homeless encampments in a generation. Nearly 61 percent of local and state homeless coalitions say they’ve experienced a rise in homelessness since the foreclosure crisis began in 2007, according to a report by the National Coalition for the Homeless. The group says the problem has worsened since the report’s release in April, with foreclosures mounting, gas and food prices rising and the job market tightening.

iReport.com: What are tough times forcing you to give up? “It’s clear that poverty and homelessness have increased,” said Michael Stoops, acting executive director of the coalition. “The economy is in chaos, we’re in an unofficial recession and Americans are worried, from the homeless to the middle class, about their future.” The phenomenon of encampments has caught advocacy groups somewhat by surprise, largely because of how quickly they have sprung up. “What you’re seeing is encampments that I haven’t seen since the 80s,” said Paul Boden, executive director of the Western Regional Advocacy Project, an umbrella group for homeless advocacy organizations in the California cities of Los Angeles, San Francisco and Oakland — and in Portland, Oregon and Seattle, Washington. The relatively tony city of Santa Barbara, California, has given over a parking lot to people who sleep in cars and vans. The city of Fresno, California, is trying to manage several proliferating tent cities, including an encampment where people have made shelters out of scrap wood. In Portland, and Seattle, homeless advocacy groups have paired with nonprofits or faith-based groups to manage tent cities as outdoor shelters. Other cities where tent cities have either appeared or expanded include include Chattanooga, Tennessee; San Diego, California; and Columbus, Ohio.

The Department of Housing and Urban Development recently reported a 12 percent drop in homelessness nationally in two years, from about 754,000 in January 2005 to 666,000 in January 2007. But the 2007 numbers omitted people who previously had been considered homeless — such as those staying with relatives or friends or living in campgrounds or motel rooms for more than a week. In addition, the housing and economic crisis began soon after HUD’s most recent data
was compiled. “The data predates the housing crisis,” said Brian Sullivan, a spokesman for HUD. “From the headlines, it might appear that the report is about yesterday. How is the housing situation affecting homelessness? That’s a great question. We’re still trying to get to that.”

In Seattle, which is experiencing a building boom and an influx of affluent professionals in neighborhoods the working class once owned, homeless encampments have been springing up — in remote places to avoid police sweeps. “What’s happening in Seattle is what’s happening everywhere else — on steroids,” said Tim Harris, executive director of Real Change, an advocacy organization that publishes a weekly newspaper sold by homeless people. Homeless people and their
advocates have organized three tent cities at City Hall in recent months to call attention to the homeless and protest the sweeps — acts of militancy, said Harris, “that we really haven’t seen around homeless activism since the early ’90s.” In Reno, officials decided to let the tent city be because shelters were already filled. Officials don’t know how many homeless people are in Reno. “But we do know that the soup kitchens are serving hundreds more meals a day and that we have more people who are homeless than we can remember,” said Jodi Royal-Goodwin, the city’s redevelopment agency director.

Those in the tents have to register and are monitored weekly to see what progress they are making in finding jobs or real housing. They are provided times to take showers in the shelter, and told where to go for food and meals. Sylvia Flynn, 51, came from northern California but lost a job almost immediately and then her apartment. Since the cheapest motels here charge upward of $200 a week, Flynn ended up at the Reno women’s shelter, which has only 20 beds and a two-week limit on stays. Out of a dozen people interviewed in the tent city, six had come to Reno from California or elsewhere over the last year, hoping for
casino jobs. “I figured this would be a great place for a job,” said Max Perez, a 19-year-old from Iowa. He couldn’t find one and ended up taking showers at the men’s shelter and sleeping in a pup tent barely big enough to cover his body. The casinos are actually starting to lay off employees. “Sometimes I think we need to put out an ad: ‘No, we don’t have any more jobs than you do,”‘ Royal-Goodwin said. The city will shut down the tent city as soon as early October because the
tents sit on what will be a parking lot for a complex of shelters and services for homeless people. The complex will include a men’s shelter, a women’s shelter, a family shelter and a resource center. Reno officials aren’t sure whether the construction will eliminate the need for the tent city. The demand, they say, keeps growing.

Over the past few months, Americans have been hearing the word
“depression” with unfamiliar and alarming regularity. The financial
crisis tearing through Wall Street is routinely described as the worst
since the Great Depression, and the recession into which we are
sinking looks deep enough, financial commentators warn, that a few
poor policy decisions could put us in a depression of our own.

It’s a frightening possibility, but also in many ways an abstraction.
The country has gone so long without a depression that it’s hard to
know what it would be like to live through one.

Most of us, of course, think we know what a depression looks like.
Open a history book and the images will be familiar: mobs at banks and
lines at soup kitchens, stockbrokers in suits selling apples on the
street, families piled with all their belongings into jalopies.
Families scrimp on coffee and flour and sugar, rinsing off tinfoil to
reuse it and re-mending their pants and dresses. A desperate
government mobilizes legions of the unemployed to build bridges and
airports, to blaze trails in national forests, to put on traveling
plays and paint social-realist murals.

Today, however, whatever a depression would look like, that’s not it.
We are separated from the 1930s by decades of profound economic,
technological, and political change, and a modern landscape of

scarcity would reflect that.

What, then, would we see instead? And how would we even know a
depression had started? It’s not a topic that professional observers
of the economy study much. And there’s no single answer, because
there’s no one way a depression might unfold. But it’s nonetheless an
important question to consider – there’s no way to make informed
decisions about the present without understanding, in some detail, the
worst-case scenario about the future.

By looking at what we know about how society and commerce would slow
down, and how people respond, it’s possible to envision what we might
face. Unlike the 1930s, when food and clothing were far more
expensive, today we spend much of our money on healthcare, child care,
and education, and we’d see uncomfortable changes in those parts of
our lives. The lines wouldn’t be outside soup kitchens but at
emergency rooms, and rather than itinerant farmers we could see waves
of laid-off office workers leaving homes to foreclosure and heading
for areas of the country where there’s more work – or just a relative
with a free room over the garage. Already hollowed-out manufacturing
cities could be all but deserted, and suburban neighborhoods left
checkerboarded, with abandoned houses next to overcrowded ones.

And above all, a depression circa 2009 might be a less visible and
more isolating experience. With the diminishing price of televisions
and the proliferation of channels, it’s getting easier and easier to
kill time alone, and free time is one thing a 21st-century depression
would create in abundance. Instead of dusty farm families, the icon of
a modern-day depression might be something as subtle as the flickering
glow of millions of televisions glimpsed through living room windows,
as the nation’s unemployed sit at home filling their days with the
cheapest form of distraction available.

The odds are, most economists say, we will yet avoid a full-blown
depression – the world’s policy makers, they argue, have learned
enough not to repeat the mistakes of the 1930s. Still, in a country
that has known little but economic growth for 50 years, it matters to
think about what life would look like without it.

. . .

There is, in fact, no agreed-upon definition of what a depression is.
Economists are unanimous that the Great Depression was the worst
economic downturn the industrial world has ever seen, and that we
haven’t had a depression since, but beyond that there is not a
consensus. Recessions have an official definition from the National
Bureau of Economic Research, but the bureau pointedly declines to
define a depression.

What sets a depression apart, most economists would agree, are
duration and the scale of joblessness. To be worthy of the name, a
depression needs to be more than a few years long – far longer than
the eight-month average of our recent recessions – and it needs to put
a lot of people out of work. The Great Depression lasted a decade by
some measures, and at its worst, one in four American workers was out
of a job. (By comparison, unemployment now is at a 14-year high of 6.5
percent.)

In a modern depression, the swelling ranks of the unemployed would
likely change the landscape of the country, uprooting people who would
rather stay where they are and trapping people who want to move. In
the 1930s, this took the visible form of waves of displaced tenant
farmers washing into California, but it also had another, subtler
effect: it froze the movement of the middle class. The suburbanization
that was to define the post-World-War-II years had in fact started in
the 1920s, only to be brought sharply to a halt when the economy
collapsed.

Today, a depression could reverse that process altogether. In a deep
and sustained downturn, home prices would likely sink further and not
rise, dimming the appeal of homeownership, a large part of suburbia’s
draw. Renting an apartment – perhaps in a city, where commuting costs
are lower – might be more tempting. And although city crime might
increase, the sense of safety that attracted city-dwellers to the
suburbs might suffer, too, in a downturn. Many suburban areas have
already seen upticks in crime in recent years, which would only get
worse as tax-poor towns spent less money on policing and public
services.

“You could have a sort of desurburbanization phenomenon,” suggests
Michael Bernstein, a historian of the Depression and the provost of
Tulane University.

The migrations kicked off by a depression wouldn’t be in one
direction, but a tangle of demographic crosscurrents: young families
moving back to their hometowns to live with the grandparents when they
can no longer afford to live on their own, parents moving in with
their adult children when their postretirement fixed incomes can no
longer support them. Some parts of the country, especially the Rust
Belt, could see a wholesale depopulation as the last remnants of the
American heavy-manufacturing base die out.

“There will be some cities like Detroit that in a real depression
could just become ghost towns,” says Jeffrey Frankel, a Harvard
economist and member of the National Bureau of Economic Research
committee that declares recessions. (Frankel does not, he emphasizes,
think we are headed for a depression.)

At the household level, the look of want is different today than
during the last prolonged downturn. The government helps the
unemployed and the poor with programs that didn’t exist when the Great
Depression hit – unemployment insurance, Medicaid, food stamps, Social
Security for seniors. Beyond that, two of the basics of existence –
food and clothing – are a lot cheaper today, thanks to industrial
agriculture and overseas labor. The average middle-class man in the
late 1920s, according to the writer and cultural critic Virginia
Postrel, could afford just six outfits, and his wife nine – by
comparison, the average woman today has seven pairs of jeans alone. So
we’re less likely to see one of the iconic images of the Great
Depression: Formerly middle-class workers in threadbare clothes lining
up for free food.

If we look closely, however, we might see more former lawyers wearing
knockoffs, doing their back-to-school shopping at Target or Wal-Mart
rather than Banana Republic and Abercrombie & Fitch. Lean times might
kill off much of the taboo around buying hand-me-downs, and with
modern distribution networks – and a push from the reduce-reuse-
recycle mind-set of environmentalism – we might see the development of
nationwide used-clothing chains.

In general, novelty would lose some of its luster. It’s not simply
that we’d buy less, we’d look for different qualities in what we buy.
New technology would grow less seductive, basic reliability more
important. We’d see more products like Nextel phones and the Panasonic
Toughbook laptop, which trade on their sturdiness, and fewer like the
iPhone – beautiful, cleverly designed, but not known for durability.
The neighborhood appliance shop could reappear in a new form –
unlicensed, with hacked cellphones and rebuilt computers.

And while very few would starve, a depression would change how we eat.
Food costs remain far below what they were for a family in the 1920s
and 1930s, but they have been rising in recent years, and many people
already on the edge of poverty would be unable to feed themselves on
their own in a harsh economic climate – soup kitchens are already
seeing an uptick in attendance. At the high end of the market,
specialty and organic foods – which drove the success of chains like
Whole Foods – would seem pointlessly expensive; the booming organic
food movement could suffer as people start to see specially grown
produce as more of a luxury than a moral choice. New England’s
surviving farmers would be particularly hard-hit, as demand for their
seasonal, relatively high-cost products dried up.

According to Marion Nestle, a food and public health professor at New
York University, people low on cash and with more time on their hands
will cook more rather than go out. They may also, Nestle suggests, try
their hands at growing and even raising more of their own food, if
they have any way of doing so. Among the green lawns of suburbia,
kitchen gardens would spring up. And it might go well beyond just
growing your own tomatoes: early last month, the English bookstore
chain Waterstone’s reported a 200 percent increase in the sales of
books on keeping chickens.

At the same time, the cheapest option for many is decidedly less
rustic: meals like packaged macaroni and cheese and drive-through fast
food. And we’re likely to see a move in that direction, as well,
toward cheaper, easier calories. If so, lean times could have the odd
effect of making the population fatter, as more Americans eat like
today’s poor.

To understand where a depression would hit hardest, however, look at
the biggest-ticket items on people’s budgets.

Housing, health insurance, transportation, and child care are the top
expenses for American families, according to Elizabeth Warren, a
bankruptcy law specialist at Harvard Law School; along with taxes,
these take up two-thirds of income, on average. And when those are
squeezed, that could mean everything from more crowded subways to a
proliferation of cheap, unlicensed day-care centers.

Health insurance premiums have risen to onerous levels in recent
years, and in a long period of unemployment – or underemployment –
they would quickly become unmanageable for many people. Dropping
health insurance would be an immediate way for families to save
hundreds of dollars per month. People without health insurance tend to
skip routine dental and medical checkups, and instead deal with health
problems only when they become acute – meaning they get their
healthcare through hospital emergency rooms.

That means even longer waits at ERs, which are even now overtaxed in
many places, and a growing financial drain on hospitals that already
struggle to pay for the care they give uninsured people. And if, as is
likely, this coincided with cuts in money for hospitals coming from
cash-strapped state and local governments, there’s a very real
possibility that many hospitals would have to close, only further
increasing the burden on those that remain open. In their place people
could rely more on federally-funded health centers, or the growing
number of drugstore clinics, like the MinuteClinics in CVS branches,
for vaccines, physicals, strep throat tests, and other basic medical
care. And as the costs of traditional medicine climbed out reach for
families, the appeal of alternative medicine would in all likelihood
grow.

Higher education, another big expense, would probably take a hit as
well. Students unable to afford private universities would opt for
public universities, students unable to afford four-year colleges
would opt for community colleges, and students unable to afford
community college wouldn’t go at all. With fewer applicants,
admissions standards would drop, with spots that once would have been
filled by more qualified, poorer students going instead to wealthier
applicants who before would not have made the cut. Some universities
would simply shrink. In Boston, a city almost uniquely dependent on
higher education, the results – fewer students renting apartments,
going to restaurants and bars, opening bank accounts, buying books,
taking taxis – would be particularly acute.

A depression would last too long for unemployed college graduates to
ride out the downturn in business or law school, so people would have
to change career plans entirely. One place that could see an uptick in
applications and interest is government work: Its relative stability,
combined with a suspicion of free-market ideology that would accompany
a truly disastrous downturn, could attract more people and even help
the public sector shake off its image as a redoubt for the mediocre
and the unambitious.

In many ways, though, today’s depression would not look like the last
one because it would not look like much at all. As Warren wrote in an
e-mail, “The New Depression would be largely invisible because people
would experience loss privately, not publicly.”

In the public imagination, the Depression was a galvanizing time, the
crucible in which the Greatest Generation came of age and came
together. That is, at best, only partly true. Harvard political
scientist Robert Putnam has found that, for many, the Depression was
isolating: Kiwanis clubs, PTAs, and other social groups lost around
half their members from 1930 to 1935. And other studies on economic
hardship suggest that it tends to sap people’s civic engagement, often
permanently.

“When people become unemployed in the Great Depression, they hunker
down, they pull in from everybody.” Putnam says.

That effect, Putnam believes, would only be more pronounced today. The
Depression was, famously, a boom time for movies – people flocked to
cheap double features to escape the dreariness of their everyday
poverty. Today, however, movies are no longer cheap. Nor is a day at
the ballpark.

Much of a modern depression would unfold in the domestic sphere:
people driving less, shopping less, and eating in their houses more.
They would watch television at home; unemployed parents would watch
over their own kids instead of taking them to day care. With online
banking, it would even be possible to have a bank run in which no one
leaves the comfort of their home.

There would be darker effects, as well. Depression, unsurprisingly, is
higher in economically distressed households; so is domestic violence.
Suicide rates go up in tough times, marriage rates and birthrates go
down. And while divorce rates usually rise in recessions, they dropped
during the Great Depression, in part because unhappy couples found
they simply couldn’t afford separation.

In precarious times, hunkering down can become not simply a defense
mechanism, but a worldview. Grant McCracken, an anthropologist
affiliated with MIT who studies consumer behavior, calls this
distinction “surging” vs. “dwelling” – the difference, as he wrote
recently on his blog, between believing that the world “teems with new
features, new things, new opportunities, new excitement” and thinking
that life’s pleasures come from counting one’s blessings and
appreciating and holding onto what one already has. Economic
uncertainty, he argues, drives us toward the latter.

As a nation, we have grown very accustomed to the momentum that
surging imparts. And while a depression remains far from inevitable,
it’s as close as it has been in a lifetime. We might want to get a
sense for what dwelling feels like.